Taiwan Cabinet Sets Lofty Goals for “Productivity 4.0” Project

At a conference held on June 4, the Taiwan Cabinet or executive ministry laid out ambitious productivity goals for the island's industries included in its “Productivity 4.0” project, an automation plan that emulates the German version to take advantage of robotics and Internet or connected technologies.

From 2015 through 2024, the project aims to boost per-capita productivity of the island's manufacturing industry to NT$10 million (US$322,580) from the current NT$6.11 million, per-capita productivity of the island's commercial industry by 40 percent to NT$2.3 million (US$74,193), and per capita productivity of the island's agricultural industry by 40 percent to NT$2 million (US$64,516). While the term "commercial" is somewhat ambiguous because any profit-seeking enterprise is by definition commercial in nature, the per-capita productivity targeted works out to some US$8,300 per year or about US$690 (NT$21,000) monthly, which is likely on par to or lower than the current average monthly wage of typical supermarket cashiers in Taipei.

Also the project aims to elevate energy productivity by a quarter and attract around NT$250 billion (US$8.06 billion) of investment from the private sector. Incidentally a TV talk show aired in Taipei recently offered anecdotal statistics that showed declining or flat incoming investments to Taiwan in recent years.

The conference was attended by 300-plus representatives from the government, the private sector, and academic circle.

According to M.J. Wu, Director General of the Industrial Development Bureau (IDB), in charge of mapping out the project, of the Ministry of the Economic Affairs (MOEA), the Cabinet will finalize these goals in July this year and implement the project sometime next year.

Wu points out that due to limited government resources, the “Productivity 4.0” project will first fund manufacturers that are seen as traditional and staple as well as small and medium-sized enterprises that are already equipped with basic information-technology (IT) and automation systems for production, leaving relatively bigger enterprises to fend for themselves or to depend on their own funding, adding that big enterprises will also benefit from such project when the 4.0 eco system will have been completed.

Wu points out that currently Taiwan's 4.0 landscape calls for system-integration manufacturers furnished with international competitiveness, crucial technologies such as sensor chips and algorithm technologies, rational business model, and total solutions, which inadvertently implies that the project can only work with the existence of relatively advanced, IT-savvy enterprises.

Wu stresses the “Productivity 4.0” project is by no means designed to replace manual labor with robots, but help them boost productivity. For instance, Siemens' factory in Amberg has raised output by seven folds after deploying the “Industrie 4.0” automation project without cutting jobs.

Although Taiwan's “Productivity 4.0” project is modeled after the “Industrie 4.0” of Germany, the former covers manufacturing, agricultural and service industries to include two more industries than the German's.

Retail and logistics are the two service sectors that the Cabinet has chosen to include in the project, with the agricultural sector to include cultivating mushroom, orchid and five other products.

MOEA officials justify including the retail and logistics sectors by stating that the former alone accounts for around 27 percent of the gross domestic product (GDP) generated by the island's service industries, with retail operations revolving around logistics.